This has been bothering me for some time. I want to buy a Genesis Mining contract, probably for Ethereum. But I keep seeing posts all over the place claiming it's a bad deal or even a scam. Why is that?
When I do the math, it seems pretty legit.
At home right now, I have 24 Nvidia GTX1060 GPUs, currently mining Ethereum (ETH).
Without boring you with all the details, this set-up cost us around NZD$15,400. It costs around NZ$440 a month to run and mines at a total of around 500MH/s.
Looking at Genesis Mining's site, I see that a similar hash rate over a two year contract will cost me US$14,000.
At an exchange rate of NZD$1.00 = USD$0.73, that's NZD$19,178.
Our electrical bill over 24 months, running the rig 24/7 will be approximately NZD$10,460. Adding that to mining rig set-up costs of $15,400, we arrive at NZD$25,960.
That's NZD$6,782 more expensive than Genesis Mining!
... over two years.
Have I done the math' correctly?
I am aware that the difficulty level for mining Ether... well anything really, is always increasing — at least so long as the commodity still has any value. I am also aware (afraid?) that mined coin will likely cost more in electricity in way less than 24 months than I could just buy them for — give or take wherever a stone toss in the dark may land.
Or that could be the case for a while and then not again. No one can really know how it's going to go, long term.
At the same time, Ethereum is making changes towards being proof of stake rather the proof of work. That might result in a sudden dump of hashing power onto all the other coins, essentially messing mining up for everyone. But that's not happening anytime very soon.
OK, so two years from now, I have a bunch of yesteryear's GPU graphics cards I could maybe recover some 20% of initial cost on, assuming the market isn't flooded by a bunch of other miners doing the same and if none of them have cooked by then. Not much chance of that working out, I should think.
Or maybe those cards will already be useless in just six more months, so I have a chance to regain a portion of initial investment, whereas this is not possible with a cloud mining contract. But would I, actually? Or would I keep the equipment in hopes the market will change down the track and become profitable before. That's exactly what has happened recently -- the reason I have mining equipment now at all.
So, long as Genesis lets me assign my hashimotos to some other coin -- and it seems they would, then I least have the same chance of remaining profitable as with my own rig AND I save a bunch on the initial set-up ... not to mention all the worry of trying to keep these things cool as the New Zealand summer approaches.
I suppose if mining does become non-profitable, for any coin with either mining scenario, then we're pretty much screwed. That doesn't seem to stop others from doing though. Am I wrong? Am I a sheep following the flock over the waterfall?
That's a scary thought, come to think of it. I already came within an inch of drowning (literally) before. Not a fun experience.
Be blunt! Tell it how you see it.
Thanks for you input!
Bryan.
